Managing for Environmental, Social and Economic Balance in Ontario s Forests. A Boreal Forum White Paper

Transcription

1 Managing for Environmental, Social and Economic Balance in Ontario s Forests A Boreal Forum White Paper

2 TABLE 0F CONTENTS PAGE CHAPTER 2 INTRODUCTION 4 1. THE FOREST RESOURCE ONTARIO S FORESTS AN OVERVIEW Ontario at a Glance Ontario s Forest Regions ONTARIO S COMMERCIAL FORESTS Area of the Undertaking (AOU) & Whitefeather Forest Age Class and Composition of Ontario s Commercial Forests STATE OF THE FOREST Document Funding and Preparation The development of this document was funded by Resolute Forest Products and was prepared by an independent professional with expertise in the areas of forest management and forest policy in Ontario. This paper was peer-reviewed by three additional, independent professionals working in the fields of forest research and forest management. This report was developed primarily using provincial level data. In a limited number of cases where provincial data were not available, Resolute specific data was utilized MANAGEMENT OF THE FOREST STANDARDS AND PRACTICES FOREST MANAGEMENT Ontario in a Global Context Legislation Forest Management Planning An Overview Forest Management Guides Current Guides Effectiveness Monitoring of Guides Public, Stakeholder and Aboriginal Consultation Renewal Monitoring and Reporting FOREST CERTIFICATION Certification An Overview Certification in Ontario Certification and the Global Marketplace PROTECTED AREAS Parks and Protected Areas Legislation Current Extent of Protected Areas Ontario in a National and Global Context Protected Area Representation Parks and Protected Areas Over Time Non-Regulated Protection SPECIES AT RISK Legislation Species at Risk in Ontario Overview Species at Risk Policy and Protection Forest-Dwelling Woodland Caribou Current Caribou Management Caribou Conservation Plan (CCP) Effectiveness of Caribou Management Emerging Caribou Policy Socio-Economic Considerations Authorizations to Continue Economic Development Activities (Exemption Regulation)

3 PAGE CHAPTER FOREST TENURE Legislation Tenure Modernization Background Outcomes Concerns and Considerations Moving Forward THE FOREST SECTOR ECONOMIC INDICATORS Forest Resource Processing Facilities (Mills) Employment and Key Economic Indicators Forest Dependent Communities Economic Benefits to Aboriginals and Aboriginal Communities Contributions to Government Crown Charge Payments and Taxes Available and Actual Harvest Levels (Area and Volume) Economic Downturn in the Industry GOVERNMENT REVITALIZATION INITIATIVES Minister s Council on Forest Sector Competitiveness Forest Sector Prosperity Fund and Forest Sector Loan Guarantee Program Northern Pulp and Paper Electricity Transition Program (NPPETP) & Northern Industrial Electricity Rate (NIER) Program Provincial Roads Funding Program Ontario Wood Promotion Program Provincial Wood Supply Competitive Process & Ontario Available Wood Report CONTINUING CHALLENGES Delivered Wood Costs Wood Supply/Access to Fibre Electricity Costs Market Pressures FUTURE OUTLOOK Bio-economy and Value-Added Products Market Recovery 85 CONCLUSION A Boreal Forum White Paper 1

4 INTRODUCTION Ontario s forest sector is an important contributor to the economic and social well-being of the province. The sector employs over 150,000 people, supports the economy of over 260 forest-dependent communities across all regions of the province, and helps fund essential social services, such as health care and education, through the payment of royalties and taxes. In addition, the sector is vital to the current, and future, economic standing of Aboriginal peoples and communities. Many Aboriginal communities are located in close proximity to Ontario s Crown forests and a significant portion of the Aboriginal population is located in northern Ontario. As such, natural resource sectors, including forestry, provide a logical source of employment and other economic benefits. Aboriginal populations are also young and growing, all at a time when the forest sector is facing future labour shortages and seeking new business partners. In light of this, it is widely held that Aboriginal communities stand to benefit greatly from a strong and stable forest sector. Sustainable forest management is the practice of regulating forestry-related activities in a manner that ensures the long-term health of the forest while providing benefits for both current and future generations. Within the Ontario context, this includes managing for a balance between the various social, economic and environmental values that exist on the land base. To date, this approach has served Ontario, and the forest sector, well. Ontario s strong regulatory framework has received international recognition and has provided a solid foundation for third-party certification efforts in the province, allowing companies to access international markets and provide assurances to customers that their products are derived from well-managed forests. Despite these achievements, however, the forest sector continues to face various challenges to its long-term viability. These include recent challenges associated with the province s regulatory framework that could potentially affect the hard-fought for, current balance that exists between social, economic and environmental values. For example, there is increasing concern that new environmental policies are reducing available wood supply, which in turn could impact the long-term potential of the sector. At the same time, successful government programs designed to increase the competitiveness of the sector, and ultimately stimulate investment, are being curtailed or are close to expiring, resulting in investment uncertainty. 2 A BOREAL FORUM WHITE PAPER

5 External market pressures, including campaigns designed to sway public opinion, are also affecting the sector. Forest companies, as well as the provincial government, are being continuously charged with criticisms over the way in which forest management activities take place on the land base. Often, these criticisms do not recognize the full extent of Ontario s laws and policies and do not adequately consider the true nature of forest management activities or their importance to the social and economic well-being of the province. Regardless, these activities have the potential to influence public and market perceptions and pose a threat to the economic stability of the sector. Ontario s forest sector has an opportunity to grow. In the wake of the global economic recession markets are expanding and the demand for forest products is on the rise, most notably in the United States Ontario s primary export market. At the same time, Ontario has been exploring opportunities to diversify itself in order to take advantage of economic efficiencies and to capitalize on new markets. However, in order to take advantage of this opportunity, long-term sustainable solutions to the challenges currently facing the forest sector are needed. The development of these solutions will rely in large part on informed discussions between the forest sector, government, and various forest stakeholders. With this in mind, this report was developed to provide forest stakeholders with an overview of the economic, social, environmental and regulatory setting in which the sector operates and in doing so, outline some of the key issues and challenges that have, and will continue to, influence forest management and the long-term success of the forest sector. More specifically, this report was designed to: 1. Provide a fact-based overview of Ontario s forestry related regulatory framework and its key elements; 2. Examine, and expand on, some of the current challenges that are facing the province s forest sector, including those stemming from the development of new government policies/regulatory changes; and 3. Outline the importance of the forest sector to the province (forest-dependent communities, Aboriginal peoples, and other stakeholders) and its potential for growth. It is anticipated that this report will help set the stage for informed dialogue among various forest stakeholders and that it will help create a platform for solutions-oriented discussions going forward. A BOREAL FORUM WHITE PAPER 3

6 1 The Forest Resource CHAPTER OVERVIEW The ability of the forest to provide economic, social and ecological benefits depends directly on the state of the resource. Healthy, functional forests are better equipped to withstand stresses and are better able to support the ecological objectives that are valued by the people of Ontario. Similarly, the size, or extent, of the resource has a direct influence on the potential capacity of the forest sector and in turn, the social and economic benefits that are enjoyed by individuals, communities and the province as a whole. The purpose of this chapter is to provide a general overview of Ontario s forest resource, including its size, diversity and general state of health. It will also outline where industrial activities are allowed on public lands. In doing so, this chapter sets the stage for subsequent sections that explore matters of public policy, as well as the social and economic importance of the forest industry ONTARIO S FORESTS AN OVERVIEW Ontario s forests cover two-thirds of the province a land area equivalent in size to the land mass of Germany, Italy and the Netherlands combined. This represents about 17% of Canada s forest and 2% of the world s. 2 Ontario Wood, June ONTARIO AT A GLANCE Ontario is home to a sizeable forest resource. Ontario s total area (land and water) is approximately million hectares, of which nearly two-thirds (71.1 million hectares) is forested 1. Ontario s forested lands represent almost one-fifth of Canada s total forest area and nearly 2% of all forested areas around the world 2,3. Canada, along with four other nations (Russian Federation, Brazil, United States and China) account for more than 50% of the world s forests 4. A more detailed breakdown of Ontario s total area by land class designation (forest, wetland, field/ agriculture, water, other non-forest) is provided in Figure 1.1. FIGURE 1.1. Provincial Area by Land Class Data obtained from 5 Ontario Ministry of Natural Resources, Forest 66.0% Water 18.1% Wetland 8.8% Field/Agriculture 5.0% Other Non-Forest 2.1% Ontario s overall land base, including Ontario s forests, is broken down into three general land ownership classes parks and protected areas (both provincial and national), Crown land (provincial land outside of parks/protected areas), and other (federal, First Nations, or privately owned lands) 1. A breakdown of Ontario s total area (all land and water) and total forest area by land ownership, on an area and a percentage basis, is provided in Table A Boreal Forum White Paper

7 In total, 87% of Ontario s total area is under the stewardship of the province (provincial portion of protected areas plus Crown land). The area under provincial stewardship is the primary focus of this report. TABLE 1.1. Breakdown of Ontario s Total Land Area and Total Forest Area by Land Ownership Class Data obtained from 5 Ontario Ministry of Natural Resources, Land Ownership Class Parks and Protected Areas Crown Other Total Ontario Total Area Area (million ha) Percent 9.1 % 77.5 % 13.4 % % Ontario Total Forest Area Area (million ha) Percent 9.0 % 80.8 % 10.2 % % ONTARIO S FOREST REGIONS Ontario s forests are classified into four distinct ecological regions - the Hudson Bay Lowlands, the Boreal Forest, the Great Lakes-St. Lawrence (GLSL) Forest, and the Deciduous Forest (see Figure 1.2). Each region supports its own distinctive landscape characteristics and unique mix of tree species as described below. HUDSON BAY LOWLANDS The Hudson Bay Lowlands is Ontario s northernmost forest region and is dominated by both treed and open muskeg. The region is over 26 million hectares in size and contains almost 23% of Ontario s forests 1. Common conifer species, trees with needle-like leaves that typically stay on throughout the year, include tamarack and black spruce, often growing along river banks and other well-drained areas. Common deciduous trees, trees with flat/broad leaves that fall off during the colder parts of the year, include white birch, dwarf birch and willow 6,7. Tamarack BOREAL FOREST The Boreal Forest is approximately 50 million hectares in size and represents the largest forest region in Ontario. The Boreal Forest contains almost 58% of the province s forests 1. Conifer species in the Boreal Forest include black and white spruce, jack pine, balsam fir, tamarack and eastern white cedar. Deciduous species include poplars and white birch. The Boreal Forest is influenced by large-scale natural disturbances, primarily fires, that promote a natural pattern of even-aged, single species forests 6,7. Black Spruce A Boreal Forum White Paper 5

8 1 The Forest Resource (cont d) GREAT LAKES-ST. LAWRENCE FOREST (GLSL) The GLSL forest covers approximately 20 million hectares of Ontario, and represents the province s second largest forest region. The GLSL forest represents almost 19% of the province s forests 1. Common conifers in the GLSL region include eastern white pine, red pine, eastern hemlock and white cedar. Common deciduous species include yellow birch, sugar maple, red maple, basswood and red oak. The GLSL region is typically influenced by small disturbance events associated with wind and disease, resulting in a forest that is unevenly aged with young and old trees commonly found within the same forest stands 6,7. Sugar maple leaf DECIDUOUS FOREST The Deciduous Forest is approximately 3 million hectares in size and represents Ontario s most southerly forest region. The Deciduous Forest region contains less than 1% of Ontario s forests 1. While many of the tree species found in the GLSL forest are also present in this region, the Deciduous Forest also contains black walnut, butternut, tulip, magnolia, black gum, many types of oaks, hickories, sassafras and red bud. Many of these species are at the northern end of their range and are more commonly found across various parts of the United States. The Deciduous Forest represents the smallest forest region in Ontario 6,7. FIGURE 1.2. Ontario s Forest Regions Map modified from 1 Watkins, Black walnut Hudson Bay Lowlands Boreal Forest Great Lakes-St. Lawrence Forest Deciduous Forest 6 A Boreal Forum White Paper

9 1.2. ONTARIO S COMMERCIAL FORESTS AREA OF THE UNDERTAKING (AOU) & WHITEFEATHER FOREST Despite the extensive nature of Ontario s Crown forests, forest management planning for commercial operations and other forest values, such as wildlife habitat, is limited to two distinct areas of the province the Area of the Undertaking (AOU) and the Whitefeather Forest (see Figure 1.3). The Whitefeather Forest is located entirely within the Boreal Forest while the AOU, which represents the majority (97%) of the managed area, is located almost exclusively within the Boreal Forest and the Great Lakes-St. Lawrence regions 7,8. Additional detail on the regulatory framework governing these areas is provided in the next section on Forest Management. FIGURE 1.3. Outline of the Areas Where Forest Management Occurs in Ontario The portion of the province above the Area of the Undertaking and the Whitefeather Forest (white coloured area at the top of the map) accounts for 60% of the combined area of the Hudson Bay Lowlands and Boreal Forest. This area is off-limits to forestry related commercial activities. Map obtained from 3 Ontario Ministry of Natural Resources and Forestry, August A Boreal Forum White Paper 7

10 1 The Forest Resource (cont d) A breakdown of the area within the AOU and the Whitefeather Forest by land ownership class is provided in Table 1.2. TABLE 1.2. Breakdown of the Area Available for Forest Management by Land Ownership Class (Area of the Undertaking and the Whitefeather Forest) in Ontario Data obtained from 8 Ontario Ministry of Natural Resources, June Land Ownership Class *Parks and Protected Area Crown Other Total Area of the Undertaking + Whitefeather Forest Total Area (million ha) Percent 10.2 % 76.4 % 13.4 % 100 % * Includes approximately 57,000 ha of proposed protected areas (i.e. not currently regulated) in the Whitefeather Forest. As noted in Table 1.2, a portion of the managed area consists of parks and protected areas. While protected areas are generally off-limits to forestry and other industrial activities, they do contribute to planning objectives associated with wildlife and other ecological values. A more detailed review of the area within the managed forest that is not available for forestry operations due to protected areas, and other factors, such as harvest deferrals for wildlife habitat, is provided in the Forest Protection section in the following chapter. Forest management planning and commercial harvest activities (AOU plus the Whitefeather Forest) are currently restricted to approximately 60% of the Boreal Forest region and less than 3% of the Hudson Bay Lowlands 7,8. Collectively, planning and commercial activities are limited to approximately 40% 1,7 of the combined area within the Boreal Forest and the Hudson Bay Lowlands. Although the Hudson Bay Lowlands region is limited in terms of its commercial value due to low forest cover and low productivity, the region does still contribute to ecological and social values, such as forest-dwelling woodland caribou habitat and tourism AGE CLASS AND COMPOSITION OF ONTARIO S COMMERCIAL FORESTS Both the species composition and age class distribution of Ontario s forests have been influenced by historic management practices, most notably fire suppression and commercial harvesting 9,10,11,12. Traditional harvesting techniques in the mid-late part of the twentieth century favoured the regeneration of faster growing species such as white birch and poplar, over slower growing conifer species such as black spruce and jack pine, particularly in the Boreal Forest. According to the provincial government 9,10, forest fire suppression efforts throughout the 1900s have resulted in a forest that contains more older age classes than would naturally occur. Summaries of the forest types and forest age class distribution within the AOU are provided in Figure 1.4 and Figure 1.5. Forest types are classified according to various characteristics, most notably tree cover, although additional factors, such as soil type and understory vegetation, are also included. 8 A Boreal Forum White Paper

11 FIGURE 1.4. Total Area by Forest Type Area by forest type in the Area of the Undertaking. Data obtained from 1 Watkins, Conifer Upland 23.6% Conifer Lowland 21.7% Mixedwood 18.7% Poplar 10.7% White Birch 7.4% Tolerant Hardwoods 7.4% Jack Pine 7.3% Red and White Pine 3.2% FIGURE 1.5. Area by Age Class Area by age class within the Area of the Undertaking. Data obtained from 1 Watkins, Area (hectares) 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000, Age Class (Years) Having a variety of age classes, as opposed to having all young or all old forest, is desirable as it creates a range of habitats to support different wildlife species. For instance, moose and deer require young forest for browsing, while species such as forest-dwelling woodland caribou and pileated woodpeckers prefer mature, or old-growth, forest conditions. Modern management practices and regulatory requirements, including the emulation of natural disturbance patterns, such as mimicking fire through harvest operations, are being implemented to help reverse/address these issues and move the forest towards a pre-industrial state 10. The emulation of natural disturbance is required under Ontario s legislative framework 14, which has been in place for over two decades, and as such is widely applied across the commercial forest. Although this approach is relatively new, positive effects are already being observed 6. The emulation of natural disturbances is recognized as an important tool in maintaining the forest s long-term health. This concept is explored in more detail in the next chapter. Ontario is one of the first jurisdictions to attempt to implement this new approach, although many other jurisdictions are moving in the same direction. Emulating natural disturbances appears to be a progressive approach to forest management Environmental Commissioner of Ontario, September 2002 A Boreal Forum White Paper 9

12 1 The Forest Resource (cont d) Collectively, the biodiversity indicators demonstrated that Ontario s forest ecosystems were stable. 6 Ontario Ministry of Natural Resources, STATE OF THE FOREST As part of its efforts to ensure that the province s forest resources are being sustainably managed, the Ontario Ministry of Natural Resources and Forestry (OMNRF) is required to regularly report on the state of the Crown forest resources using well-established criteria and indicators. These findings are summarized on a five-year basis in the province s State of Ontario s Forests (SOF) reports. One key component of this monitoring and reporting initiative is the assessment of ecosystem diversity. Table 1.3 provides a summary of the various findings associated with the four provincial indicators of ecosystem diversity as reported in the 2012 OMNRF SOF 6. The 2012 SOF is based on a reporting period and provides information for Ontario s forests as a whole (total forest area), as well as at the commercial forest level (specifically the Area of the Undertaking). As noted in Table 1.3, the findings for most criteria were positive for the province s forests as a whole and for the forests managed for commercial activities, indicating a state of good health. Although significant gaps in the parks and protected areas network are noted, these are primarily attributable to low representation in the northern and southern portions of the province that are outside of the area of commercial activity 6,15. Additional details on parks and protected areas are provided later in this report. While the total area affected by new man-made corridors, such as roads and railways, increased slightly over the reporting period as a result of forestry activities, the overall trend was found to be stable. It should be noted that new policies are currently being developed to address road densities, particularly in areas that support wide-ranging species such as forest-dwelling woodland caribou. Conversely, current forest management activities were found to reduce forest fragmentation, effectively resulting in increased forest patch size and a corresponding reduction in forest edge. This positive change can be attributed to Ontario s management approach of emulating natural disturbance patterns during forest harvesting as discussed earlier in this chapter. Forest fragmentation is a concern as it can lead to a loss of wildlife habitat for some species and therefore lower levels of biodiversity, increased predation of songbirds and other animals, and reduced mobility for some species that are unable to travel between isolated areas of habitat 16. The findings related to some of the other criteria and indicators used to assess the state of the forest, such as wildlife monitoring, are addressed later in this report. For more comprehensive information related to all of the OMNRF assessment criteria, readers are encouraged to consult the most recent SOF report (2012) A Boreal Forum White Paper

13 TABLE 1.3. Summary of Ecosystem Diversity Indicators for Ontario s Forests Modified from 6 Ontario Ministry of Natural Resources, Trend Criteria State Provincial Forests (Total) Commercial Forests Composition (tree species) and Structure (age) of Ecosystems Good Over the State of Ontario s Forests (SOF) reporting period there was very little change provincially in ecosystem composition and structure. Forests in the Area of the Undertaking (AOU) were stable over the SOF reporting period, and have been for decades. Levels of Fragmentation and Connectedness of Forest Ecosystem Components Good The provincial trend is stable, with some local variation. Southern Ontario showed a trend to fewer, smaller and more fragmented forests. Forest metrics in the AOU are stable, and have been for some time. There has been a slight increase in the size of forest patches and an associated decrease in the amount of edge (where forested area and non-forest area meet) in the last five years, likely resulting from the introduction of Ontario s approach of emulating natural disturbance patterns in forest harvesting. *Representation of Ecological Features by Protected Area Category Mixed There are still substantial gaps in the representation, particularly in portions of the Hudson Bay Lowlands Ecozone and the Mixedwood Plains Ecozone. During the last reporting period, there have been modest increases in representation in the Ontario Shield and Mixedwood Plains Ecozones. Large gaps continue to exist, however, in the Hudson Bay Lowlands and Mixedwood Plains Ecozones. **Man-made Corridors, such as Roads, Utility Corridors & Railways Good n/a The area of road corridors represents only 2.0% of the AOU total area, and as a proportion of that area, increases by 0.16% annually. Between 1999 and 2008 there was a trend towards increased access control on forest access roads and abandonment of forest access roads, which, has benefits for biodiversity conservation. * The Ontario shield represent the ecological region where most commercial forestry takes place. The Mixedwood plains are the southernmost ecological region. The Hudson Bay Lowlands represent the most northern ecological region. ** Criteria is specific to the AOU. A Boreal Forum White Paper 11

14 1 The Forest Resource (cont d) CHAPTER REVIEW This chapter was intended to provide an overview of the size, state and diversity of Ontario s forest resources. It was also developed to introduce the subset of Ontario s forest where commercial operations take place and to provide some insight into the guiding principles of forest management in the province, including the emulation of natural disturbance patterns. CITATIONS 1. Watkins, Larry The Forest Resources of Ontario Ontario Ministry of Natural Resources, Sault Ste. Marie Ontario, Forest Evaluation and Standards Section, Forests Branch 307 pp Ontario Wood. June Ontario Ministry of Natural Resources and Forestry. August Food and Agriculture Organization. August Ontario Ministry of Natural Resources Annual Report on Forest Management /10. Queen s Printer for Ontario. 105 p Ontario Ministry of Natural Resources State of Ontario s Forests. Toronto: Queen s Printer for Ontario. 73p Ontario Ministry of Natural Resources and Forestry. August Ontario Ministry of Natural Resources. June Unpublished data. 9. Ontario Ministry of Natural Resources. June Ontario Ministry of Natural Resources. March Forest Management Guide for Boreal Landscapes. Toronto: Queen s Printer for Ontario. 104 pp Hearndon, K.W., Millson, S.V., and Wilson, W.C A report on the status of forest regeneration. Queens Printer for Ontario, Ontario, Canada. 12. Jackson, S.M., Pinto, F., Malcolm, J.R., Wilson, E.R A comparison of pre-european settlement (1857) and current ( ) forest composition in central Ontario. Can. J. For. Res. Vol Environmental Commissioner of Ontario. September Annual Report. Developing Sustainability. 196p Government of Ontario Crown Forest Sustainability Act. elaws_statutes_94c25_e.htm 15. Ontario Ministry of Natural Resources State of Ontario s Protected Areas Report. Queen s Printer for Ontario. 92p Wedeles, C., Sleep, D. J. H Fragmentation in the Boreal Forest and Possible Effects on Terrestrial Wildlife, National Council for Air and Stream Improvement, Technical Bulletin No p. 12 A Boreal Forum White Paper

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16 2 Management of the Forest Standards and Practices CHAPTER OVERVIEW The purposes of this chapter are to illustrate Ontario s commitment to sustainable forest management and to outline how the province currently provides for a diverse range of ecological, social and economic values. The vast majority of information presented in the following sections paints a positive picture for the province, although the latter parts of this chapter do highlight some recent concerns regarding the economic impacts of certain new forest-related policies. The following sections are intended to pave the way for a broader discussion on the importance of the forest sector to the economic well-being of the province, its communities and its people, which takes place in the following chapter. The first two sections of this chapter highlight Ontario s status and achievements with regard to sustainable forest management, both through the province s legal framework and the adherence of forestry practices to third-party, voluntary standards, known as forest certification. These are followed by an overview of Ontario s parks and protected areas network, which provides a foundation for the conservation of biological diversity. The remaining sections discuss some ongoing developments related to forest policy, specifically, policies associated with species at risk and forest tenure FOREST MANAGEMENT Forestry in Ontario is governed by a rigorous regulatory framework that, at its core, promotes the long-term health of the forest. The following sections explore some of the key concepts and principles of forest management in Ontario, specifically the provision of sustainability, consultation (e.g. with Aboriginal communities, the public, and forest stakeholders), and adaptive management. A brief introduction to the key pieces of legislation that form the basis of Ontario s forest management system, as well as the forest management planning process, is also provided. Throughout this section the reader will be provided with the information needed to assess Ontario s standing in a global context and to determine whether the forest is being managed in a fashion that is consistent with the province s underlying principles of sustainability. 14 A Boreal Forum White Paper

17 ONTARIO IN A GLOBAL CONTEXT Ontario is recognized as a leader in sustainable forest management, both within Canada and on an international stage. For example, a recent report commissioned under the Canadian Boreal Forest Agreement 1 found Ontario to have one of the most comprehensive and prescriptive forest management planning systems in Canada, while an international study from Yale University 2 concluded that Canadian provinces, including Ontario, have some of the most stringent management standards in the world. Further, a report commissioned by Forestry Innovation Investment 3 acknowledged Canadian provinces, including Ontario, as global leaders in the implementation and achievement of sustainable forest management. This latter study assessed the ability of various forest regions around the world to provide sustainable forest management using 16 assessment criteria including harvesting practices, reforestation, forest conversion, species management (including species at risk), water quality management and public participation and community involvement/first Nations input. Many of these elements are discussed in more detail in the following sections LEGISLATION The legal framework for forest management is provided primarily through the Crown Forest Sustainability Act (CFSA, 1994) 4 and the forest sector s class approvals under the provincial Environmental Assessment Act (EAA, 1990) 5. Together, these documents set the stage for sustainability by outlining the standards for forest management planning and forestry activities in the province. The influence of other pieces of legislation, such as the Endangered Species Act, on forest management is discussed in subsequent sections. Canada (B.C., Ontario) and Australia (New South Wales) are the countries with the most demanding legislation on the studied elements. 3 Forestry Innovation Investment, July 2009 In Ontario, forest management and forestry practices are provided with evergreen, or class approvals under the EAA, one for the Area of the Undertaking (Declaration Order MNR-71 6 ) and one for the Whitefeather Forest (Declaration Order MNR-74 7 ). These approvals outline a series of conditions that must be adhered to by the Ontario Ministry of Natural Resources and Forestry (OMNRF), and ultimately the forest sector, during forest management planning and the implementation of commercial operations. The conditions set out in the Declaration Orders cover recurring activities, such as harvesting and road construction, and provide direction related to the preparation, review and approval of Forest Management Plans (FMPs). Forestry is one of the few sectors in the province to receive class approvals under Ontario s EAA. A Boreal Forum White Paper 15

18 2 Management of the Forest Standards and Practices (cont d) FOREST MANAGEMENT PLANNING AN OVERVIEW The planning of forestry activities in Ontario takes place at the Forest Management Unit (FMU) level, which are sub-divisions of the larger areas available for commercial operations. As of April 2014, there were 42 FMUs in Ontario (see Figure 2.1). Under Ontario s regulatory system, each FMU is required to prepare an FMP before any forestry activities can take place. The purpose of FMPs is to 8,9 : outline the long-term management strategy and objectives associated with a management unit, for example, what the forest should look like 100 years from now; identify the activities that will take place on the management unit in the short-term, including how much can be harvested and where harvesting can occur, what renewal activities will take place, and where roads can/will be constructed; and prescribe the environmental standards and restrictions associated with various management activities, such as the identification of mandatory no-harvest reserves around various wildlife features such as dens and nests. In essence, FMPs provide the instrument through which the province s regulatory framework is applied during planning and on-the-ground activities. FIGURE 2.1. Forest Management Units in Ontario Map obtained from 10 Ontario Ministry of Natural Resources, June A Boreal Forum White Paper

19 FMPs are developed for a ten-year period and are prepared in two distinct phases. The first phase includes the establishment of the long-term management strategy and the detailed planning of all operations including harvesting, renewal and road construction, for the first five-year term of the plan (see Figure 2.2). The second phase includes detailed planning of operations for the second five-year term. The long-term management strategy applies to the full ten-year term of the plan, provided that it remains consistent with the government s policy objectives. For example, new policy direction may require revisions to the long-term strategy prior to the preparation of the second five-year term of operations. The long-term strategy is reviewed part way through the first term of operations to ensure it remains relevant. Forest management planning is a complex, rigorous and time-consuming activity. It generally takes thirty months to prepare the long-term management strategy and the detailed planning of operations for first five-year term (first phase) and sixteen to twenty months for the detailed planning of operations for the second five-year term (second phase). Costs associated with the development of an FMP often exceed $1 million. Some of the critical elements of forest management planning, including requirements for multi-stakeholder participation, are discussed in more detail below. FIGURE 2.2. The First Phase of Forest Management Planning in Ontario Figure obtained from 9 Ontario Ministry of Natural Resources and Forestry, August A Boreal Forum White Paper 17

20 2 Management of the Forest Standards and Practices (cont d) These guides deal with biodiversity in a holistic manner in order to ensure that there is suitable habitat across the entire forest landscape for wildlife, birds, fish, plants, etc., as well as protection for specific habitat features (e.g. nests, species at risk). 12Ontario Ministry of Natural Resources, June FOREST MANAGEMENT GUIDES The protection of Ontario s diverse forest values, such as wildlife habitat and water quality, during forest operations is provided largely through the application of forest management guides. These guides provide direction on acceptable management practices and ensure that various ecological and social values, such as cultural heritage sites, are adequately planned for and protected during forestry operations. In doing so, the guides help provide the foundation for forest sustainability 11. The following sections provide an overview of the current forest management guides and the government s program to monitor their effectiveness CURRENT GUIDES The OMNRF recently merged its various environmental guidelines (previously over thirty existed) into three comprehensive guides. These include two guides that provide landscape level direction (Forest Management Guide for Boreal Landscapes 13, Forest Management Guide for Great Lakes-St. Lawrence Landscapes 14 ) and one additional guide that directs management activities at the localized forest level (Forest Management Guide for Conserving Biodiversity at the Stand and Site Scales 15 ). The landscape level guides contain direction to help forest managers move the forest towards a more pre-industrial state and in doing so, help create and maintain a diversity of forest conditions, that is, a mixture of young and older forests, over time. Using computer simulations, specific targets for each FMU are established by estimating the natural variability, or range of conditions, that would likely exist on the landscape in the absence of human influence (commonly referred to as the range of natural variation). Long-term management strategies are then developed to guide forestry activities and move the existing condition of the forest towards these established targets. By managing for a natural set of forest conditions, these guides help provide habitat for the majority of native species of plants and animals across the province. This landscape direction is complemented by the localized forest area guide, which is then used to address the habitat needs of individual species that may not be captured or provided for at the larger landscape level, for example, the protection of peregrine falcon nests. As noted in the previous chapter, one of the fundamental principles of forest management in Ontario is the emulation of natural disturbance. This concept, along with the requirement to move the forest towards a more natural condition, is central to the management direction provided in the current guides and is based on the premise that by emulating the pattern, structure, and composition of natural forest ecosystems, the natural patterns of biodiversity and ecological processes will be maintained. This approach is integral to the long-term sustainability of the forest. 18 A Boreal Forum White Paper

21 EFFECTIVENESS MONITORING OF GUIDES As part of its commitment to sustainable forest management the OMNRF is required to assess and report on the effectiveness of forest management guides, an initiative supported through scientific studies and wildlife population monitoring programs. Although these efforts are continuous and ongoing, there is evidence to suggest that previous and existing management practices are having the desired effect. For example, a recent review of buffers around red-shouldered hawk nests revealed the existing standards to be effective 16. Similarly, according to the OMNRF State of Ontario s Forests (SOF) report (2012) 17 monitoring efforts have found that the populations of many provincially featured species, including white-tailed deer, moose, and pileated woodpeckers, are stable or increasing. As not all wildlife can be efficiently monitored, featured species are selected to represent a variety of habitat types, including young and old forest. For other species where findings suggest that modifications to management practices are needed, the results are utilized to update the standards during guide reviews. Adaptive management refers to the process of continually improving management standards by monitoring, and learning from the outcomes of, current operations and practices. The concept of adaptive management is widely used in natural resource disciplines as a means of linking learning and experience with policy development and implementation. In keeping with the principle of adaptive management, forestry guides are reviewed every five years to ensure they incorporate the most up to date science and to incorporate new knowledge. Opportunities for public input during guide review are provided through the Environmental Registry 18, a website where public notices related to environmental matters being proposed by provincial government ministries are posted. With the release of the landscape and localized forest level guides, the OMNRF is in the process of revising its approach to effectiveness monitoring. A summary of the new approach is outlined in the recent publication Effectiveness Monitoring of Forest Management Guides Strategic Direction PUBLIC, STAKEHOLDER AND ABORIGINAL CONSULTATION Ensuring opportunities for Aboriginal communities, the public, and local stakeholders to get involved is a fundamental component of the forest management planning process and is key in the identification and protection/management of local values. Opportunities for public and local stakeholder involvement in the planning process include participation on the Local Citizens Committee (LCC) or through one of numerous management plan public review periods. LCCs are made up of representatives who are appointed by the local OMNRF District Manager and who formally assist in the preparation of individual FMPs. Each management unit will have a unique LCC membership that will include representatives who live and work in the area and/or who represent local organizations with a direct and distinct interest in the plan. The LCC may also appoint one of its members to participate directly on the planning team that is responsible for producing the plan 6,8. A Boreal Forum White Paper 19

22 2 Management of the Forest Standards and Practices (cont d) In addition, the public and stakeholders are notified at various stages of plan development and are provided with ongoing opportunities for review, comment and input during plan preparation and implementation. In instances where specific concerns are identified, and cannot be resolved through normal planning protocols or informal discussions, stakeholders can initiate a formal issue resolution process. Details on the specific process are provided in the government s Forest Management Planning Manual 8. Figure 2.3 provides a summary of various measures of LCC effectiveness (fair process, effective LCC, fair outcomes, process satisfaction) over time, as determined through LCC member surveys 17. All measures show moderate increases over the reported timeframe. Although there are still opportunities for improvement, these results are positive and suggest that the LCC framework is providing an important and increasingly effective means for stakeholders to become engaged in the forest management planning process. FIGURE 2.3. Measures of LCC Effectiveness Average agreement or satisfaction ratings by Local Citizens Committee (LCC) members. Based on surveys with ranges from +2 (strongly agree/very satisfied) to -2 (strongly disagree/very dissatisfied). Data obtained from 17 Ontario Ministry of Natural Resources, Agreement/Satisfaction Rating Fair Outcomes Effective LCC Fair Process Process Satisfaction Current standards require that each Aboriginal community within or adjacent to the management unit be directly consulted during plan preparation, and further, that each community be provided with an opportunity for direct representation on the planning team. The planning process also requires the development of a report for each FMU that identifies and provides for the protection of Aboriginal values 6,8. 20 A Boreal Forum White Paper

23 According to the provincial government 17, the number of Aboriginal communities represented directly on planning teams has been increasing over the past several years. For example, during the reporting period, 32 Aboriginal representatives served on planning teams for 48 FMPs, compared with 108 representatives on 44 planning teams from Although it is recognized that an opportunity for greater participation exists, the overall trend is viewed to be very positive RENEWAL In Ontario, all harvested areas must be regenerated by law. Examples of regeneration activities include tree planting and aerial seeding. Under the CFSA, the provincial government has established two programs/mechanisms to help ensure that the necessary funds exist to regenerate the forest, either following harvesting operations or natural disturbances the Forest Renewal Trusts (FRT) and the Forestry Futures Trust (FFT) 4. Individual FRTs exist for each management unit and were established to ensure that funds are available to regenerate the forest following harvesting activities. Companies are required to make deposits into the appropriate FRT at the time of harvest. Following the completion of renewal work, eligible invoices are submitted to the Trust for reimbursement. The funds in any particular management unit s account can only be used for renewal efforts on its associated land base. The FFT, which provides a complementary function to the FRTs, was established primarily to fund renewal expenses on Crown land where forests have been depleted or damaged by fire or other natural causes. Other applications of the FFT are to fund renewal expenses on land where the responsible company has become insolvent and to fund intensive stand management and pest control activities as deemed appropriate by the government. Figure 2.4 provides a provincial summary of FRT deposits and expenditures in recent years in relation to harvest levels. As illustrated, trends in renewal expenditures closely follow trends in harvest intensity that is, when more fibre is harvested, more money is spent on regeneration. As noted in Figure 2.5, annual renewal activities in the province, such as tree planting, have also kept pace with harvest levels over the past decade indicating an appropriate level of regeneration. Although the area being renewed has declined in recent years, this is a direct result of lower harvest levels resulting from the recent economic downturn (i.e. as less area is harvested, less area needs to be renewed). Any changes, or reductions, in the area renewed from year-to-year therefore, should not be interpreted as a decline in the forest sector s commitment to the post-harvest regeneration of the forest. A Boreal Forum White Paper 21

24 2 Management of the Forest Standards and Practices (cont d) FIGURE 2.4. Forest Renewal Trust Deposits and Expenditures in Relation to Harvest Levels Data obtained from 10 Ontario Ministry of Natural Resources, June Deposits and Expenditures ($ Millions) Volume Harvested (m 3 ) Deposits Expenditures Volume harvested FIGURE 2.5. Forest Area Renewed Clearcut Silviculture System Data obtained from 10 Ontario Ministry of Natural Resources, June Area in Thousands of Hectares Assisted Clearcut Regeneration Natural Clearcut Regeneration Harvest Clearcut 22 A Boreal Forum White Paper

25 MONITORING AND REPORTING Forestry activities are monitored through a variety of government regulated programs. These monitoring programs are in place primarily to assess the compliance of individual activities against the standards and approved practices described in the FMP. However, they are also used to evaluate the sustainability of Ontario s broader forest management framework. For example, renewal activities are monitored to make sure they are achieving the desired results 17,20. Monitoring activities are a key component of adaptive management. One of the main monitoring programs related to commercial forestry is the forest compliance monitoring program. This program is carried out on a year round basis to ensure that forest operations are conducted in accordance with provincial policies and the approved FMPs. As part of this program, government and forest industry representatives inspect and report on a variety of activities related to access (e.g. road construction), harvesting, renewal (e.g. the planting of trees), and maintenance (e.g. controlling competing/ undesirable vegetation) 20,21. A summary of the forest compliance monitoring program over the past several years is provided in Figure 2.6. The compliance rate across all operations (access, harvest, renewal and maintenance) for both industry and OMNRF has been 94% or higher for the timeframe reported. The reduction in the number of reports from 2007 to 2011 is a reflection of the reduction in harvesting and other activities that took place over this period as a result of the recent economic recession. FIGURE 2.6. Summary of Forest Compliance Monitoring Data obtained from 10 Ontario Ministry of Natural Resources, June Number of Reports 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Compliant Reports Non-compliant Reports A Boreal Forum White Paper 23

26 2 Management of the Forest Standards and Practices (cont d) Another important component of the province s monitoring framework is the Independent Forest Audit (IFA) program. Under the IFA program, audits are conducted on each management unit every five to seven years to review the performance of both forest managers and the OMNRF in meeting their forest management responsibilities 20. Key elements of audits include examining whether: the planning process has followed provincial laws and approved management directions/standards; on-the-ground operations have been conducted in accordance with the FMP for the management unit; and forest management activities are achieving the specified management objectives. In addition, IFAs identify recommended areas for improvement and provide an overall assessment of forest sustainability for the management unit. Under the IFA program, audits are performed by independent, multidisciplinary teams. Once completed, individual audit reports are approved in the provincial legislature and subsequently posted on the OMNRF website. IFAs were completed for fourteen management units in 2011 (the most recent year made publicly available), ten of which have been tabled in the legislature. All ten of these audits found the management unit to be sustainably managed and in compliance with provincial regulatory requirements 22. The province s Silvicultural Effectiveness Monitoring (SEM) program is used to track forest regeneration activities and to determine whether renewal efforts are achieving the desired results. In order to allow for enough time for new trees to become established and grow, renewal success is typically measured several years after regeneration efforts have been completed 20. The most recent OMNRF SOF report (2012) 17 found that 91% of the areas assessed during the associated reporting period were successfully regenerated, although it has been recognized that in some cases species composition did not achieve plan specifications. The results of the SEM program are used to assess and continually improve regeneration techniques and standards. Additional information on these and other monitoring programs, including the Forest Health Monitoring program, are available on the OMNRF website 20. As noted in the following section, most management units in the province have obtained third-party certification. Certification refers to a voluntary process used by forest companies to obtain independent verification that forestry activities are being conducted in a sustainable manner. As part of this process, management activities are subject to annual certification audits. As part of its commitments to transparency and accountability, the OMNRF prepares public reports that provide interested parties with information on the current state of the forest and how the resource is being managed, including information on how much area has been harvested and how much area has been renewed. Key reports related to commercial operations include the Annual Reports on Forest Management and the SOF reports. The most recent versions of these documents are available on the OMNRF website 17, A Boreal Forum White Paper

27 SECTION REVIEW The purpose of this section was to provide a detailed review of principles and elements of forest management planning in Ontario and the province s general approach to achieving sustainability. This section was also intended to help assess Ontario s standing, specifically with regard to sustainable forest management, on the global stage. CITATIONS 1. Van Damme, L., Burkhardt, R., Plante, L. and Saunders, K Status Report on Ecosystem-based Management (EBM): Policy Barriers and Opportunities for EBM in Canada. Prepared for the Canadian Boreal Forest Agreement. KBM Resources Group, Thunder Bay, ON. 99 pp Cashore, Benjamin Global Environmental Forest Policies: Canada as a Constant Case Comparison of Select Forest Practice Regulations. 10p Forestry Innovation Investment. July Comparison of Selected Forest Certification Standards Final Report. 147p. Original report submitted by Indufor. 4. Government of Ontario Crown Forest Sustainability Act. elaws_statutes_94c25_e.htm 5. Government of Ontario Environmental Assessment Act. elaws_statutes_90e18_e.htm 6. Ontario Ministry of the Environment Order Made under the Environmental Assessment Act, Declaration Order (MNR-71) Regarding MNR s Class Environmental Assessment Approval for Forest Management on Crown Lands in Ontario Ontario Ministry of the Environment Order Made under the Environmental Assessment Act, Declaration Order regarding Forest Management on Crown Lands in the Whitefeather Forest. environmental-assessment-forestry-projects 8. Ontario Ministry of Natural Resources. November Forest Management Planning Manual for Ontario s Crown Forests. Toronto: Queen s Printer for Ontario. 447 pp Ontario Ministry of Natural Resources and Forestry. August forest-management-planning 10. Ontario Ministry of Natural Resources. June Unpublished data. 11. Ontario Ministry of Natural Resources and Forestry website. August forest-management-guides 12. Ontario Ministry of Natural Resources. June STEL02_ html 13. Ontario Ministry of Natural Resources. March Forest Management Guide for Boreal Landscapes. Toronto: Queen s Printer for Ontario. 104 pp Ontario Ministry of Natural Resources. March Forest Management Guide for Great Lakes - St. Lawrence Landscapes. Toronto: Queen s Printer for Ontario. 57 pp Ontario Ministry of Natural Resources Forest Management Guide for Conserving Biodiversity at the Stand and Site Scales. Toronto: Queen s Printer for Ontario. 211 pp Naylor, B. J., J. A. Baker, K. J. Szuba Effects of forest management practices on red-shouldered hawks in Ontario. The Forestry Chronicle. Vol: 80(1). 17. Ontario Ministry of Natural Resources State of Ontario s Forests. Toronto: Queen s Printer for Ontario. 73p Environmental Registry. August Rempel, R. S., J. Baker, G. Brown, J. Churcher, M. Gluck, B. Naylor Guide Effectiveness Monitoring: Strategic Direction. Information Paper CNFER IP-006. Ontario Ministry of Natural Resources, Centre for Northern Forest Ecosystem Research, Thunder Bay, Ontario, Canada. 25p Ontario Ministry of Natural Resources and Forestry. August forest-monitoring 21. Ontario Ministry of Natural Resources Annual Report on Forest Management 2009/10. Queen s Printer for Ontario. 105 p Ontario Ministry of Natural Resources. June A Boreal Forum White Paper 25

28 2 Management of the Forest Standards and Practices (cont d) All standards promote responsible forest management through the conservation of biological diversity, maintenance of wildlife habitat and species diversity, protection of special sites, soil and water, and sustainable harvest levels. 1 Forest Products Association of Canada, FOREST CERTIFICATION In many parts of the world, even in countries where rigorous regulatory standards are in place, forest certification plays an important role in the promotion and recognition of sustainable forest management practices. Forest certification refers to a voluntary process used by forest managers to obtain thirdparty verification that forestry activities are being implemented in a sustainable manner. In contrast to regulatory standards developed by governments, certification standards are developed and administered by objective, independent parties, and as a result provide an additional benchmark against which to assess sustainable forest management. The following section provides an overview of the relevant certification systems in Ontario and highlights the provincial forest sector s achievements in this area CERTIFICATION AN OVERVIEW As noted, forest certification is a voluntary process whereby forest managers have their planning and forestry practices verified against independently developed sustainable forest management standards. Compliance with standards is determined through third-party audits that assess planning and on-theground activities against pre-defined performance criteria on various issues including harvest levels, the conservation of biodiversity, wildlife habitat, species at risk and the protection of soil and water resources. In some cases, obtaining third-party certification may require meeting standards that are above and beyond regulatory requirements, even in regions such as Ontario with strict regulatory regimes 1, CERTIFICATION IN ONTARIO Within Ontario, there are three primary forest certification systems. These are the Canadian Standards Association (CSA), the Forest Stewardship Council (FSC) and the Sustainable Forestry Initiative (SFI), all of which are recognized internationally. A brief overview of these systems and their associated standards is provided in Table 2.1. Although differences exist between the various systems, all three are recognized as promoting sustainable forest management. 26 A Boreal Forum White Paper

29 TABLE 2.1. Summary of the Canadian Standards Association (CSA), Forest Stewardship Council (FSC) and Sustainable Forestry Initiative (SFI) Certification Systems Modified from 2 Ontario Ministry of Natural Resources, Certification Summary Principles/Criteria/Indicators CSA Canadian Standards Association FSC Forest Stewardship Council The CSA forest certification standard is based on the criteria and indicators of sustainable forest management developed by the Canadian Council of Forest Ministers. Six criteria are used to assess the environmental, social and economic benefits derived from forests. FSC-certified forests are evaluated against FSC s Principles and Criteria for responsible forest management. The FSC s Principles and Criteria form the guiding framework for developing regional forest stewardship standards appropriate to local social, ecological and economic conditions. The following revised principles were approved in principle in Biological diversity Ecosystem condition and productivity Soil and water Role in global ecological cycles Economic and social benefits Society s responsibility Compliance with laws Workers rights and employment conditions Indigenous peoples rights Community relations Benefits from the forest Environmental values and impacts Management planning Monitoring and assessment High conservation values Implementation of management activities SFI Sustainable Forestry Initiative The SFI standard is based on 14 principles and 20 objectives. Each objective includes performance measures and indicators. Sustainable forestry Forest productivity and health Protection of water resources Protection of biological diversity Aesthetics and recreation Protection of special sites Responsible fibre sourcing practices in North America Avoidance of controversial sources including illegal logging in offshore fibre sourcing Legal compliance Research Training and education Public involvement Transparency Continual improvement A Boreal Forum White Paper 27

30 2 Management of the Forest Standards and Practices (cont d) The area of Crown forests certified in Ontario has increased significantly since 2002 and as of 2013, there were over 24 million hectares of Crown forest land certified within the Area of the Undertaking (AOU) (Figure 2.7), representing over 70% of the Crown management unit land base in the AOU 2. The minor reductions observed in 2010 and 2012 are attributable largely to the bankruptcy of some companies previously operating in Ontario. Many of the areas that are not certified are currently managed by the province. According to the Ontario Ministry of Natural Resources and Forestry 2, there were approximately 340 million hectares of certified forests globally at the end of Of this, 150 million hectares (44%) were located within Canada. At the time, Ontario represented over 7% of the world s certified forests. It is recognized that Ontario s forest management framework addresses many of the requirements of CSA, FSC and SFI, and that this framework provides a strong foundation for forest companies operating in Ontario to pursue third-party certification. FIGURE 2.7. Area by Certification System 2002 to 2013 Data obtained from 2 Ontario Ministry of Natural Resources, Area in millions of hectares CSA SFI FSC CSA/FSC FSC/SFI Figure 2.8 provides a geographical overview of certification in Ontario as of the end of According to provincial government statistics 2, SFI was the predominant certification system in the Northwestern region while FSC was the primary certification system in the Northeastern and Southern regions. As per Figure 2.8, multiple Forest Management Units have been certified to more than one system. 28 A Boreal Forum White Paper

31 FIGURE 2.8. Management Unit Forest Certification in Ontario, by Certification System Map obtained from 2 Ontario Ministry of Natural Resources, Since the end of 2013, one FSC certificate in the Northwest region of the province, covering two management units, has been suspended 3. However, both forests remain certified under the SFI system, and as a result, the total area certified in the province was not affected. Two management units in the Northeast region, totalling over 1.2 million hectares, have been newly certified under FSC in ,5. Neither management unit was certified under any system as of the end of One management unit in the Northeast region, covering approximately 850,000 hectares, has been newly certified under SFI in As of the end of 2013 this management unit was, and remains, certified under FSC. A 2009 report from Forestry Innovation Investment 7,8 concluded that strict regulatory regimes combined with adherence to voluntary certification standards have made Canadian provinces, including Ontario, world leaders in the achievement of sustainable forest management CERTIFICATION AND THE GLOBAL MARKETPLACE Over the past several years, forest certification has become increasingly recognized in marketplaces around the world as customers look for assurances that products are derived from sustainably managed forests that protect human health, biodiversity and the economic well-being of forest-dependent communities. As a result, many companies now include certification requirements as part of their purchasing policies. In its 2012 Global Market Survey 9, FSC found that 80% of respondents saw the demand for their/fsc certified products increasing or staying the same, further demonstrating the growing demand for certified and sustainable products. Accordingly, for many companies certification is viewed as a tool to access domestic and global markets. A Boreal Forum White Paper 29

32 2 Management of the Forest Standards and Practices (cont d) SECTION REVIEW This section was developed to introduce readers to the concept of certification and its role in promoting/ verifying various elements of sustainable forest management. The achievements of the Ontario forest sector in meeting various internationally recognized standards were also explored. CITATIONS 1. Forest Products Association of Canada Forest Certification in Canada The Programs, Similarities & Achievements. 19p Ontario Ministry of Natural Resources State of Resources Reporting Forest Certification in Ontario. 7p Forest Stewardship Council Canada. October Forest Stewardship Council. October License Code: FSC-C Forest Stewardship Council. October License Code: FSC-C Sustainable Forestry Initiative. November nipissing-forest-resource-management-inc-may-2014/ 7. Forestry Innovation Investment. July Comparison of Selected Forest Certification Standards Final Report. 147p. Original report submitted by Indufor. 8. Naturally: Wood Examining the Linkage Between Forest Regulation and Forest Certification Around the World. 12p. 9. Forest Stewardship Council Global Market Survey. 24p A Boreal Forum White Paper

33 2.3. PROTECTED AREAS As discussed in previous sections, Ontario s rigorous regulatory framework plays a central role in promoting the sustainability of the province s forest resources. One additional means, and the focus of this section, is through the identification and protection of specific forest areas where harvesting is prohibited. The following sections are designed to provide the reader with an overview of the two primary means of protecting forests parks and protected areas, and the creation of no-harvest reserves during commercial activities. The summaries presented below were developed to equip the reader with the necessary information to assess the status of Ontario s protected areas network and to help illustrate the extent to which the forest, even within the area where commercial activities are permitted, is off-limits to harvesting PARKS AND PROTECTED AREAS As noted in the recent government publication, State of Ontario s Forests (2012) 1, parks and protected areas function as critical sources and refuges for biodiversity on a variety of scales at the ecosystem, species, and genetic level. The conservation of biodiversity is one of the primary objectives/roles of parks and protected areas LEGISLATION Protected areas in Ontario are governed primarily by the Provincial Parks and Conservation Reserves Act (PPCRA, 2006) 2. Under the PPCRA, forestry activities in parks and conservation reserves are prohibited, with the exception of the Recreation/Utilization zone within Algonquin Park. National parks fall under the jurisdiction of the Canada National Parks Act (2000) 3, which is administered by the federal government CURRENT EXTENT OF PROTECTED AREAS Approximately 9.1% of the province s total area (9.7 million hectares) is located within protected areas 4, the majority of which is under provincial jurisdiction (Figure 2.9). This includes almost 9.5 million hectares at the provincial level with an additional 208,000 hectares located in national parks. Approximately 9.5% (almost 4.2 million hectares) of the Area of the Undertaking (AOU) 4 and 30% (approximately 350,000 hectares) of the Whitefeather Forest 4,5 are currently located within regulated parks and protected areas. A Boreal Forum White Paper 31

34 2 Management of the Forest Standards and Practices (cont d) FIGURE 2.9. Provincial Parks and Conservation Reserves in Ontario Map obtained from 4 Ontario Ministry of Natural Resources, June A Boreal Forum White Paper

35 The provincial government has committed to the protection of at least 225,000 square kilometres of the Far North, the area north of the AOU (see Figure 2.10), through the development of an interconnected series of protected areas. Fulfillment of this commitment, established under the Far North Act (2010) 6, will result in approximately 21% of the province being set aside within protected areas in the Far North alone (i.e. in addition to protected areas in the AOU and in Southern portion of Ontario) bringing the percent of Ontario s total area located in protected areas to a minimum of 25%. Currently, economic development in the Far North is limited, however, the natural resource potential of the region is recognized as significant, particularly with respect to mining 7. The Far North Act was designed to ensure the sustainable development of the region through local level, community based landuse planning that will help identify which areas will be protected and which will be available for development. FIGURE Map Outlining the Far North, Area of the Undertaking (AOU) and the Whitefeather Forest The Far North is the portion of the province located north of the AOU. Map modified from 8 Ontario Ministry of Natural Resources and Forestry, August Far North A Boreal Forum White Paper 33

36 2 Management of the Forest Standards and Practices (cont d) ONTARIO IN A NATIONAL AND GLOBAL CONTEXT Estimates on the percentage of area that should be set aside as protected areas have varied over time and are often based upon the region in question. Ontario s government, along with those of other Canadian provinces, specifically British Columbia and Saskatchewan, has recognized a target of 12% 9,10, a threshold that was initially proposed as part of the World Wildlife Fund Endangered Spaces campaign in the late 1980s 11. In a more global context, many countries have embraced the International Union for Conservation of Nature proposed target of 10% 9,12. The current global average for allocated protected areas is approximately 13% 13. Figure 2.11 provides a recent comparison of all thirteen Canadian provinces and territories 14. The percentage of area in protected areas ranges from a low 2.8% in Prince Edward Island to a high of 15.7% in British Columbia. Figure 2.12 compares the extent of protected areas, by area and percent, of various countries around the world, including Canada 13. As illustrated, Ontario currently ranks fifth among Canadian provinces and territories, and on a global scale ranks on par with/behind many other industrial nations. However, it should be noted that these figures represent a single point in time. Completion of the Far North landuse planning initiative would make Ontario a leading jurisdiction, both nationally and around the world, with regard to protected areas. Achieving this degree of protection, however, is contingent on the province satisfying its commitments under the Far North Act. FIGURE Percentage of Terrestrial Area Protected by Canadian Province and Territory Data obtained from 14 Environment Canada, August % of Canada s terrestrial area is located in protected areas BC AB YT MB ON NU QC NT SK NS NF NB PE 34 A Boreal Forum White Paper

37 FIGURE Protected Areas in Selected Countries Data obtained from 13 Environment Canada, August United States Russian Federation Australia Canada France Germany Italy United Kingdom Japan Sweden Millions of Square Kilometres Protected Percent Protected PROTECTED AREA REPRESENTATION The extent to which a system of parks and protected areas is effective and complete depends largely on the degree to which it is able to capture the full range of ecosystems and ecological processes that exist on the landscape a concept referred to as representation. The underlying principle of this approach is that by capturing the full range of ecosystems and ecosystem processes, protected areas will capture the full spectrum of biodiversity values that they support. Ecosystems and/or ecosystem processes that are not represented are considered gaps in the protected areas network 9,15,16. In Ontario, ecosystems are identified and classified through the Ecological Land Classification (ELC) system that categorizes ecosystems at different scales based on unique combinations of landform and vegetation (L/V) characteristics. At the highest level, the ELC system classifies ecosystems into distinct regions called ecozones, which are further subdivided into ecoregions and ecodistricts based on the consideration of additional criteria or elements (see Figure 2.13) 15. Figure 2.13 outlines the extent to which L/V representation has been achieved across Ontario s ecozones (Hudson Bay Lowlands, Boreal Shield, Mixedwood Plains), ecoregions and ecodistricts. Minimum thresholds are set at 1% or 50 hectares, whichever is greater, of each naturally occurring landform/vegetation association within each of the province s 71 ecodistricts. As illustrated, there is significant variation across the province, however, ecological representation in protected areas is highest in the Ontario Shield Ecozone (10.4%), where the majority of commercial activities take place, followed by the Hudson Bay Lowlands Ecozone (9.9%), and the Mixedwood Plains Ecozone (0.5%) 15. A Boreal Forum White Paper 35

38 2 Management of the Forest Standards and Practices (cont d) FIGURE Representation of Ecological Features Map obtained from 15 Ontario Ministry of Natural Resources, A Boreal Forum White Paper

39 PARKS AND PROTECTED AREAS OVER TIME The total area in the province s parks and protected areas network increased exponentially over the latter part of the 20th century (see Figure 2.14) as a result of various initiatives. A historical summary of the provincial protected area network can be found in the Ontario Ministry of Natural Resources and Forestry document State of Ontario s Protected Areas Report 15. A key effort in the realization of the current protected areas network was the Lands for Life planning process ( ), which resulted in the identification of 378 new protected areas covering approximately 2.4 million hectares, specifically within the area designated for commercial forestry/the AOU. A critical factor in the success of this initiative was a government commitment to protect the economic integrity of the forest industry by ensuring that expansion of the protected areas system would not negatively impact fibre supply or increase the cost of wood to mills 17,18. This commitment was achieved through the implementation of a series of measures including more effective harvesting of small-diameter wood, improved growth and yield information, and improved utilization of existing fibre. Overall, this commitment underscores the potential importance of providing fibre supply security as part of the continued expansion of the province s protected areas network in the commercial forest. For more detailed information on the outcomes of the Lands for Life process (referred to as the Living Legacy Land Use Strategy), readers are encouraged to visit the government s website 10. FIGURE Growth of Ontario s Parks and Protected Areas Network Over Time Data obtained from 15 Ontario Ministry of Natural Resources, Area (millions of hectares) Number of Protected Areas to to to to to to to to to to to to 2009 A Boreal Forum White Paper 37

40 2 Management of the Forest Standards and Practices (cont d) NON-REGULATED PROTECTION In addition to prohibitions on forestry operations in protected areas, other factors can significantly reduce the area available for forestry operations. From an ecological perspective, the most important considerations are contained within the various guides used during the forest management planning process. These considerations, along with other factors such as non-productive land and geographical impediments (e.g. steep slopes), all contribute to the overall reduction in the area available for commercial forestry operations. Currently, there is no provincial summary of the area off-limits to harvesting due to non-regulated means. However, a review of four Forest Management Units (FMUs) in Northwestern Ontario (Figure 2.15) 19 reveals that the land unavailable for harvest operations in commercial areas can range from 18.3% to as high as 75%. Reserves specifically associated with the protection of ecological values, including riparian reserves and long-term deferrals for forest-dwelling woodland caribou, can remove anywhere from 8.9% to 67.7% of an individual FMU from commercial activities over the life of a Forest Management Plan. As opposed to regulated protected areas, deferred areas and reserves are identified through the forest management planning process. As new plans are developed, deferred areas may move across the landscape to reflect changes in forest conditions and to ensure that the appropriate levels of protection are provided on a continual basis. Although, as with forest-dwelling woodland caribou (see the following section on Species at Risk), areas may be deferred for extensive periods of time in some cases, over one-hundred years. As deferred areas/reserves move, certain areas previously off-limits to commercial activities may become available for harvest. However, as noted in the following section, reserves and deferred areas do have the potential to negatively impact fibre supply and other social and economic values, particularly as forest management guides are revised and/or as new standards or policy directions are introduced. FIGURE Summary of Areas Not Available for Harvest on Four Forest Management Units in Northwestern Ontario The Dog River-Matawin management unit is not within the province s caribou range. The English River and Black Spruce management units are partially within the province s caribou range. The Caribou management unit is located entirely within the province s caribou range. Data obtained from 19 Resolute Forest Products, August % 70% Percent Area Unavailable 60% 50% 40% 30% 20% 10% 0% Riparian Reserves Other Reserves Caribou Deferals Non- Productive Geographical Impediments Total Unavailable Forest Management Units Black Spruce Caribou Dog River-Matawin English River Average 38 A Boreal Forum White Paper

41 SECTION REVIEW This section on forest protection was developed to highlight the importance of parks and protected areas in the conservation of biological diversity. This section also provided insight into the current extent of Ontario s protected areas network and a review of the province s standing with regard to protected areas on a national and international stage. This section also looked at the potential of non-regulated protection to reduce the area available for commercial operations. CITATIONS 1. Ontario Ministry of Natural Resources State of Ontario s Forests. Toronto: Queen s Printer for Ontario. 73p Government of Ontario Provincial Parks and Conservation Reserves Act. english/elaws_statutes_06p12_e.htm 3. Government of Canada Canada National Parks Act Ontario Ministry of Natural Resources. June Unpublished data. 5. Government on Ontario Designation and Classification of Provincial Parks (Ontario Regulation 316/07) Government of Ontario Far North Act Ontario Ministry of Natural Resources and Forestry. September far-north-ontario 8. Ontario Ministry of Natural Resources and Forestry. August Resolute Forest Products MNR Gaptool Protected Areas Gap Analysis for Ecodistricts Overlapping the Black Spruce, Caribou, Dog River-Matawin, and English River Sustainable Forest Licences. Unpublished. 152p. 10. Ontario Ministry of Natural Resources Ontario s Living Legacy Land Use Strategy. repository/mon/2000/ pdf 11. Killan, G Protected Places: A History of Ontario s Provincial Parks System. Dundurn Press Limited. 426p. 12. International Union for Conservation of Nature Parks for Life: Report of the IV th World Congress on National Parks and Protected Areas. Gland, Switzerland: IUCN. as cited in Resolute Forest Products MNR Gaptool Protected Areas Gap Analysis for Ecodistricts Overlapping the Black Spruce, Caribou, Dog River-Matawin, and English River Sustainable Forest Licences. Unpublished. 152p. 13. Environment Canada. August Environment Canada. August Ontario Ministry of Natural Resources State of Ontario s Protected Areas Report. Queen s Printer for Ontario. 92p Ontario Biodiversity Council State of Ontario s Biodiversity A report of the Ontario Biodiversity Council, Peterborough, ON Ontario Forest Accord - A Foundation for Progress Unpublished. 6p. View.asp?Document_ID=10379&Attachment_ID= Ontario Forest Accord Advisory Board Final Report on the Implementation of the Accord. Unpublished 25p. 19. Resolute Forest Products. August Protected Areas Summary. A Boreal Forum White Paper 39

42 2 Management of the Forest Standards and Practices (cont d) 2.4. SPECIES AT RISK Species at risk represents one of the most contentious areas of natural resource policy in Ontario. While most, if not all, stakeholders and economic development industries support the need to conserve and recover these species, the current legislative framework is often criticized for being overly restrictive and inefficient, with many sectors citing significant, negative implications 1,2,3,4. This section explores both the recovery actions and economic repercussions associated with species at risk in the province. A general overview of the number and classification of species at risk and the current approach to species at risk policy are discussed, followed by more detailed information related to forest-dwelling woodland caribou one of Ontario s most prominent at risk species. Some of the known socio-economic impacts of species at risk management are also explored LEGISLATION The protection of species at risk in Ontario is governed primarily through the provincial Endangered Species Act (ESA) 5, which was revised in Prior to the revision of the ESA, forest-related policy for many species at risk was developed under the direction and influence of the Crown Forest Sustainability Act (CFSA, 1994) 6. Currently, there are established linkages between the two pieces of legislation to ensure that any management direction provided under the ESA is followed during the forest management planning process and adhered to during on-the-ground activities. At the federal level, species at risk as protected under Canada s Species at Risk Act (SARA, 2000) 7. Policies and management directions developed under the provincial ESA are typically developed to be consistent with the requirements of the federal legislation. As a result, this section deals mainly with the provincial legislation and its associated policies SPECIES AT RISK IN ONTARIO OVERVIEW Under the provincial ESA, species at risk currently represent less than 1% of the 30,000 species that call Ontario home. At the time of this report, there were approximately 220 species at risk in Ontario 8. A breakdown of the different classifications of species is provided in Table 2.2. While species at risk are found across all parts of Ontario, the greatest number of species at risk is typically found in the southernmost areas of the province where development activities are most concentrated. For example, Essex, the southernmost census region in the province (approximately 1,851 km 2 ) is home to 88 species at risk. By contrast, Kenora, the most northern census region (approximately 407,213 km 2 ) contains 20 species at risk 9. In the context of commercial forestry operations, approximately 23% of threatened or endangered species in the province, a total of about 40, are located within the Area of the Undertaking (AOU), many of which are found beyond the AOUs borders 10,11. As referenced, endangered and threatened species are the primary focus of the ESA. For additional information on the location of various species, readers are encouraged to visit the Ontario Ministry of Natural Resources and Forestry (OMNRF) website A Boreal Forum White Paper

43 TABLE 2.2. Definitions for the Various Classifications of Species at Risk in Ontario and Number of Species by Classification Data/information obtained from 5 Government of Ontario, 2007 and 8 Government of Ontario, Classification Definition No. of Species Extirpated Endangered Threatened Special Concern Lives somewhere in the world, lived at one time in the wild in Ontario, but no longer lives in the wild in Ontario Lives in the wild in Ontario but is facing imminent extinction or extirpation Lives in the wild in Ontario, is not endangered, but is likely to become endangered if steps are not taken to address factors threatening to lead to its extinction or extirpation Lives in the wild in Ontario, is not endangered or threatened, but may become threatened or endangered because of a combination of biological characteristics and identified threats SPECIES AT RISK POLICY AND PROTECTION GENERAL Under the ESA, species classified as endangered or threatened are protected through the development and application of a comprehensive series of regulations and policies that includes, among others, habitat regulations, recovery strategies and government response statements 5. Collectively, these documents identify the habitat for each species, outline the management recovery objectives and activities that the government intends to pursue, and ultimately, provide specific direction to various economic development activities around the province to ensure that both species and their habitats are appropriately protected. To date, policies have been developed and implemented for a variety of forest-dependent species including wood turtle, peregrine falcon, and forest-dwelling woodland caribou. As an additional safeguard, activities with the potential to negatively affect individuals of a threatened or endangered species, or their habitat, must receive special authorization from the government before they can proceed. Finally, all endangered and threatened species are provided with automatic habitat protection, as defined through general criteria in the legislation, while the necessary policies are developed. Although the ESA focuses largely on endangered and threatened species, provisions for the protection and recovery of extirpated and special concern species are also contained within the legislation. For more on the recovery approaches to these species readers are encouraged to consult the ESA 5 directly. A Boreal Forum White Paper 41

44 2 Management of the Forest Standards and Practices (cont d) FORESTRY All applicable policies developed under the ESA are built directly into the sector s Forest Management Plans (FMPs) (see the first section in this chapter for more on forest management planning). This includes the incorporation of the various ESA standards and directions related to harvesting (e.g. location, timing restrictions, buffers around nests) and other forestry activities such as road construction and the application of herbicides. In those cases where policy direction has not yet been developed under the ESA, for example where a new species has been listed, appropriate guidelines must be developed during plan preparation in consultation with provincial government biologists specializing in species at risk FOREST-DWELLING WOODLAND CARIBOU Ontario supports two distinct ecotypes of woodland caribou forest-dwelling, which resides in the Boreal Forest year round, and forest-tundra, which lives on the tundra during the spring and summer months and only seeks refuge in the Boreal Forest during the winter 13. In Ontario, only forest-dwelling woodland caribou is listed as a species at risk (threatened) and is the only one found within the area actively managed for forestry. In Ontario, 54% of forest-dwelling woodland caribou s continuous range is off-limits to commercial forestry activities. Approximately 70% of the combined range of both caribou ecotypes, forest-dwelling and forest-tundra, is located outside the commercial forest 10. The remainder of this document deals only with forest-dwelling woodland caribou (from here referred to only as caribou). Caribou require large areas of continuous conifer dominated forest for their survival. Large areas provide refuge from predators, as caribou maintain low densities as a safeguard against predation, while conifer canopies provide shelter during the winter months. Given that the forest industry also relies on large and predictable quantities of conifer, the management of caribou is of particular interest to the sector 13,14. Caribou were listed as a threatened species in response to a reduction in its provincial range that began in the late 1800s. This range reduction has been attributed to a variety of inter-related factors including human settlement and land clearing, historic forest practices, landscape fragmentation, over-hunting, and predation issues in the past A Boreal Forum White Paper

45 CURRENT CARIBOU MANAGEMENT CARIBOU CONSERVATION PLAN (CCP) The overarching policy direction for caribou is contained within a document called the Caribou Conservation Plan (CCP) 13, which outlines the comprehensive suite of actions the government intends to take with respect to caribou management, conservation and recovery. The CCP satisfies a provincial requirement to develop a response statement (i.e. an action plan) as per the ESA. Although not a focal point of this report, it should be noted that the development of the CCP is consistent with the requirements of the federal SARA 7. The backbone of caribou conservation under the CCP is the development of a long-term, year, schedule that outlines the progression of eligible harvest areas and mandatory habitat deferrals on each management unit. This approach is called a dynamic caribou habitat schedule (DCHS), or caribou mosaic (see Figure 2.16) 13,15. This schedule ensures that a sufficient amount of habitat is deferred from harvest activities at all times to provide for caribou populations. As previously disturbed areas, either through forestry or fire, are regenerated and mature to develop the appropriate habitat characteristics, they become part of the mosaic, allowing other, typically older deferral areas to be harvested, thereby re-starting the process. As a result, deferred areas are dynamic and move around the landscape. However, they are always maintained at a minimum level and in a configuration that provides for continuous and continual habitat. As presented in the previous section, upwards of 60% of a management unit can be in deferred habitat areas. By concentrating harvest activities in a smaller number of specific areas over an extended period (as per Figure 2.16), this process also helps to minimize road networks and therefore mitigate the overall impacts of harvest activities on caribou populations. Determining the extent of habitat necessary on each management unit is based on an assessment of pre-industrial forest conditions. This approach is consistent with the broader requirement to emulate natural disturbance patterns and natural forest conditions under the CFSA and the direction provided in the Forest Management Guide for Boreal Landscapes 16. Additional requirements of the CCP include the active promotion of conifer regeneration, the development and implementation of road management strategies, including requirements for road closures and/or road removal, and the protection of sensitive calving sites. It is worth noting that a similar mosaic approach to caribou management has been in place in Northwestern Ontario under the CFSA since the mid-1990s, although not all elements are the same. For example, the current DCHS is applied in some areas further south than the previous mosaic management direction. The application of a mosaic approach over a longer timeframe (from the mid-1990s to the present) however does allow for some insight into whether this approach is working. A Boreal Forum White Paper 43

46 2 Management of the Forest Standards and Practices (cont d) FIGURE Dynamic Caribou Habitat Schedule, or Caribou Mosaic for the Lac Seul Forest in Northwestern Ontario Time periods in the legend correspond to eligible harvest periods - areas are deferred from harvest in the interim. Map obtained from the 15 Forest Management Plan for the Lac Seul Forest, A Boreal Forum White Paper

47 EFFECTIVENESS OF CARIBOU MANAGEMENT As part of its commitment to the recovery of caribou, the provincial government has implemented a caribou monitoring program using aerial survey, Global Positioning System collars and other methods to help provide baseline data on caribou populations and location, to help assess the effectiveness of current caribou management approaches, and to allow for the refinement and improvement of policies going forward 14. As both the monitoring program and the policies under the ESA are relatively new, there is currently no direct, comprehensive information regarding the effectiveness of the DCHS. In addition, caribou occur at very low densities and have relatively low reproductive rates. As these characteristics create challenges to the effective monitoring of caribou movements and caribou populations levels, it is difficult to draw conclusions regarding how effective previous management activities have been in maintaining caribou on the land base. Reliable evidence to support, or refute, the mosaic approach will likely take many years. It should be noted, however, that observations related to the implementation of the mosaic approach in the Northwest starting in the 1990s do indicate some initial level of success 13. These findings are complemented by OMNRF studies, which found that caribou will return to previously harvested sites, a position that is supported by three case studies in Ontario the Lucy Lake, Castlewood Lake, and South Allely Lake forests 14. Although, it should be recognized that all three of these forests were harvested prior to the implementation of modern management techniques, specifically between 1952 and 1970, and generally used non-contemporary methods such as horse logging. Adjustments to forest management practices in northwestern Ontario since the early 1990s appear to have had some initial success at retaining caribou and caribou habitat near the southern edge of range. 13Ontario Ministry of Natural Resources, EMERGING CARIBOU POLICY As part of its requirements under the CCP, the provincial government is moving towards a system that will assess the health of caribou and manage their habitat at a population range level 17,18. This work is currently underway and is expected to be released in late The proposed caribou population ranges are illustrated in Figure As part of the range management approach, the government will assess the well-being of individual caribou populations based on four criteria: population size; population trend; total disturbance of habitat within the range; and habitat arrangement. A Boreal Forum White Paper 45

48 2 Management of the Forest Standards and Practices (cont d) FIGURE Caribou Population Ranges in Ontario Map obtained from 18 Ontario Ministry of Natural Resources, Once completed, the results of each assessment, commonly referred to as range conditions, will be used to inform future management and recovery activities in the associated range and ultimately will be used to determine whether specific resource management activities, for example forestry or mining, will be permitted. In ranges that have substantial habitat and/or have been affected by minimal disturbance, industrial activities will be permitted to continue within the parameters of the previously mentioned policies, certification requirements and geographical limitations. 46 A Boreal Forum White Paper

49 Although this methodology is well-established at the federal level 19,20,21 and is recognized as a progressive approach to caribou management, it has raised several concerns within the forest sector and among other stakeholders in Ontario 22,23,24. Firstly, population ranges are larger than Forest Management Units (FMUs), which means that multiple management units will be present, at least in part, within a given range. Although caribou objectives will be set at the range level, achievement of these objectives will still be accomplished through the forest management planning process. To date, there has been no indication as to how range level objectives will be divided among affected management units. For instance, if there is insufficient habitat and additional habitat deferrals are needed, it is currently not clear which management unit(s) will be affected. Individual management units are under the management responsibility of different companies and often support a unique group of stakeholders, forest-dependent communities and Aboriginal interests. As such, the application of any additional constraints on forest management could inadvertently result in social or economic repercussions that extend beyond the forest industry. Secondly, some of the underlying science to support the province s approach, particularly with respect to assessing the total disturbance within a range, is based on data from other Canadian jurisdictions and has not been ground tested in Ontario. Total disturbance within a range is used to estimate recruitment levels (e.g. the less disturbance, the greater likelihood a population will grow) which depends on complex relationships and models to generate reliable predictions (i.e. how much disturbance of habitat is too much). The current model being used in the province is based on data from twenty-four caribou populations across Canada, of which only two were located in Ontario. Recent scientific literature 25 has cautioned that models developed using data from one jurisdiction do not translate well to others. As a result, any future policies or management decisions based on the use of this model could be ineffective in achieving caribou conservation objectives, while also having unnecessary impacts on fibre supply. In ranges that are insufficient to sustain caribou, there may be limited flexibility in approving land use and resource management activities that do not improve range condition in the short-term. 26Ontario Ministry of Natural Resources, August 2013 Thirdly, although some preliminary assessments on range condition have been conducted by the federal government across the country 19,20,21, those related to Ontario have been based largely on only one of the four criteria outlined above, specifically total disturbance level. This oversimplified approach, not to mention the limited inclusion of Ontario-specific populations in the development of recruitment models, suggests that these range assessments were less than comprehensive. Despite the expected arrival of more complete information in late 2014, some organizations are using these initial assessments to campaign against harvest operations and other economic development activities 27,28. Although limitations on economic development activities, including forestry, may occur in the event that range assessments are unsatisfactory, no known socio-economic impact assessments are being conducted as part of this policy development. A Boreal Forum White Paper 47

50 2 Management of the Forest Standards and Practices (cont d) The dip in total harvest volume can be attributed to the current age class distribution of the Pic River Ojibway Forest and new constraints related to the woodland caribou habitat management. 31 Forest Management Plan for the Pic River Forest, SOCIO-ECONOMIC CONSIDERATIONS While the protection of species at risk is recognized as fundamental to the ecological well-being of Ontario, there has been a growing number of concerns since the inception of the ESA with respect to project delays, increased costs and lost economic opportunities across a number of sectors. For example, the National Farmers Union estimates that compliance with the ESA is costing individual farms $4,200 annually, with initial one-time costs of $9, On average, this represents up to 10% of an individual farm s gross income. Similarly, the County of Renfrew Public Works Department, which has tracked the additional costs of complying with the ESA, found an incremental cost impact on road construction and maintenance of $2,418/km resulting from the application of new species at risk related standards 2. In 2013, a multi-disciplinary panel, including representatives from various industrial sectors and non-industrial stakeholders, recommended that the government conduct formal socio-economic assessments during the development of ESA related policies and that periodic reviews regarding the broader impacts (and benefits) of the legislation be undertaken 4. It was further recommended that all such assessments should be made available to the public and stakeholders in a timely and transparent fashion. As of the writing of this report, no comprehensive government effort to assess the impacts associated with species at risk management was known to have been designed or implemented. Although the impacts associated with the broader forest sector have not been directly quantified, estimates from management units in the southern portion of the province indicate that the ESA is resulting in hundreds of thousands of dollars in increased costs per FMU each year 2. In the north, early indications suggest that new policies, particularly those related to caribou, are having a notable, negative impact on wood supply. For example, an examination of ten current FMPs 30 that have incorporated elements of the CCP reveals that 60% predict a reduction in wood supply or harvest area when compared to previous plans, resulting, at least in part, from the application of new caribou guidelines (see Table 2.3). An additional 30% of the plans expect some level of reduction in wood supply/harvest area, some of which identify the need to balance various management objectives, including the provision of wildlife habitat, as influencing their reductions. Only one plan noted an increase in available fibre volumes. 48 A Boreal Forum White Paper

51 TABLE 2.3. Trends in Wood Supply Across Sequential Forest Management Plans for Various Management Units in the Province Data obtained from individual Forest Management Plans at 30 Ontario Ministry of Natural Resources and Forestry, August Management Unit (year of current plan) Abitibi-River Forest (2012) Black Spruce Forest (2011) Gordon Cosens Forest (2010) Kenogami (2011) Kenora Forest (2012) Lac Seul Forest (2011) Lake Nipigon Forest (2011) Pic River (2013) Nagagami (2011) Whiskey Jack (2012) Reduction in Wood Supply/Harvest Area Due to Caribou Management Due to Other Factors Increase in Wood Supply It should be noted that this assessment only considers the impacts of the CCP and associated direction established since It does not account for any loss of fibre supply or harvest area impacts as a result of previously developed management direction related to caribou (as noted previously, in the Northwest region, caribou management has been ongoing since the late 1990s), or additional limiting factors like geographical impediments, other conservation objectives and unrelated environmental concerns. As such, the cumulative impacts of caribou management on wood supply over the past fifteen years are likely much larger than the incremental impacts noted in current FMPs. Further, it does not account for, or anticipate the impacts associated with future caribou policy such as the range management approach. A more comprehensive overview of provincial wood supply trends in the province is provided in the following chapter. A Boreal Forum White Paper 49

52 2 Management of the Forest Standards and Practices (cont d) The amended regulation will allow for more efficient implementation of the ESA while continuing to protect species at risk and their habitats. 34 Environmental Registry Posting, June AUTHORIZATIONS TO CONTINUE ECONOMIC DEVELOPMENT ACTIVITIES (EXEMPTION REGULATION) In 2013, the OMNRF provided authorizations for various economic development related activities, including forestry, to take place within and around the habitat of certain species at risk. As noted previously, government authorizations are required where activities have the potential to harm/harass individual members of a species classified as threatened or endangered, or damage/destroy their habitat. These authorizations were provided through a regulation, one of four approval mechanisms identified under the ESA 32,33,34. In recognition of the need for greater efficiencies under the ESA, the regulation provides for a permit by rule system for various development activities. Under this system, recurring, lower risk activities do not require individual authorizations provided they follow a pre-determined, prescribed set of rules and conditions outlined by government. These rules are developed specifically to minimize and mitigate any negative impacts on species at risk. With regard to forestry, the regulation stipulates that, consistent with the forest management planning process, government approved safeguards (e.g. buffers around nests, dynamic caribou habitat schedules) for all species at risk must be in place in order for forestry activities to proceed. Regardless of the conditions outlined in the regulation, and the explicit need to follow strict government requirements, the decision to provide the regulation drew criticisms from some organizations 34,35,36 that saw this type of authorization as an outright exemption from the ESA (it should be noted that the applicable section of the Act uses the term exemption ). However, as described, this is not the case. As per the government s decision notice on this issue 34, the regulation was based largely on recommendations provided by a multi-stakeholder panel 4 as a means to minimize duplicative processes and streamline approvals without compromising species at risk conservation efforts. 50 A Boreal Forum White Paper

53 SECTION REVIEW Species at risk remain one of the most controversial areas of forest policy in the province. This section was intended to provide an overview of the policy framework for species at risk in Ontario, with specific focus on caribou, while simultaneously highlighting some of the social and economic repercussions of current management practices and emerging standards. This section underscores the need for balance in the development and application of forestry-related policy. CITATIONS 1. George Morris Centre. September The Ontario Endangered Species Act: Understanding the Incentives, Implications, and Alternatives. 16p County of Renfrew. February Improving the Endangered Species Act - Impacts on Renfrew County Ontario Forest Industries Association. January Pre-Budget Submission. 21p Endangered Species Act Panel - Report and Recommendations Submitted for the Consideration of the Minister of Natural Resources. January p Government of Ontario Endangered Species Act, elaws_statutes_07e06_e.htm 6. Government of Ontario Crown Forest Sustainability Act. elaws_statutes_94c25_e.htm 7. Government of Canada Species at Risk Act Government of Ontario Species at Risk in Ontario (SARO) List (Ontario Regulation 230/08) Ontario Ministry of Natural Resources and Forestry. August find-species-risk-your-area 10. Ontario Ministry of Natural Resources. June 2014/Ontario Ministry of Natural Resources and Forestry. October Unpublished data. 11. Ontario Ministry of Natural Resources and Forestry. August species-risk-ontario-list 12. Ontario Ministry of Natural Resources Forest Management Planning Manual for Ontario s Crown Forests. Toronto: Queen s Printer for Ontario. 447 pp Ontario Ministry of Natural Resources Ontario s Woodland Caribou Conservation Plan. Queen s Printer for Ontario, Toronto Ontario, Canada. 28 p Ontario Ministry of Natural Resources Ontario s Woodland Caribou Conservation Plan Progress Report. 21p Forest Management Plan for the Lac Seul Forest, Ontario Ministry of Natural Resources. March Forest Management Guide for Boreal Landscapes. Toronto: Queen s Printer for Ontario. 104 pp Ontario Ministry of Natural Resources Draft Integrated Assessment Protocol for Woodland Caribou Ranges in Ontario. Science and Information Branch, Peterborough Ontario. 104p. ptl_en.pdf A Boreal Forum White Paper 51

54 2 Management of the Forest Standards and Practices (cont d) 18. Ontario Ministry of Natural Resources Draft Range Management Policy in Support of Woodland Caribou Conservation and Recovery. Species at Risk Branch, Toronto, Ontario. 24 p. ply_en.pdf 19. Environment Canada Scientific Assessment to Inform the Identification of Critical Habitat for Woodland Caribou (Rangifer tarandus caribou), Boreal Population, in Canada: 2011 update. Ottawa, Ontario, Canada. 102 pp. plus appendices Environment Canada Recovery Strategy for the Woodland Caribou (Rangifer tarandus caribou), Boreal population, in Canada. Species at Risk Act Recovery Strategy Series. Environment Canada, Ottawa. xi + 138p Environment Canada Scientific Review for the Identification of Critical Habitat for Woodland Caribou (Rangifer tarandus caribou), Boreal Population, in Canada. August Ottawa: Environment Canada. 72 pp. plus 180 pp Appendices Resolute Forest Products EBR posting # ; Range Management Policy Supports Woodland Caribou Conservation and Recovery in Ontario But Not Northern Communities. 23. Ontario Forest Industries Association EBR posting # ; Range Management Policy Supports Woodland Caribou Conservation and Recovery in Ontario But Not Northern Communities. 24. Ontario Federation of Anglers and Hunters. September Development of a Range Management Policy in support of Woodland Caribou (Forest-dwelling Boreal Population) Conservation and Recovery in Ontario (EBR Posting ) 25. Sleep, D. J. H., Loehle, C Validation of a Demographic Model for Woodland Caribou. Journal of Wildlife Management. Vol 74(7). 26. Ontario Ministry of Natural Resources. August Range Management Policy in support of Woodland Caribou Conservation and Recovery (Presentation). 27. Canadian Parks and Wilderness Society-Wildlands League. July A Snapshot of Caribou Range Condition in Ontario Canadian Parks and Wilderness Society and David Suzuki Foundation. December Population Critical: How are Caribou Faring? First annual report on governments efforts to conserve Canada s declining Boreal caribou populations Census of Agriculture and Strategic Policy Branch, MMAP/MRA as cited in County of Renfrew. February Improving the Endangered Species Act - Impacts on Renfrew County. 30. Ontario Ministry of Natural Resources and Forestry. August Find a Forest Management Plan Forest Management Plan for the Pic River Forest, Government of Ontario General Regulation (Ontario Regulation 242/08). english/elaws_regs_080242_e.htm 33. Government of Ontario Ontario Regulation 176/13. elaws_src_regs_r13176_e.htm 34. Environmental Registry Posting. June MTE4MDY5&statusId=MTc5MjY1&language=en 35. Canadian Parks and Wilderness Society. October Ontario Nature. October A Boreal Forum White Paper

55 2.5. FOREST TENURE Forest tenure refers to the system that governs such factors as who manages the forests (who prepares and implements the management plans), how fibre is allocated (to which companies and under what type of legal instruments), and how fibre is priced. As each of these elements has the potential to influence wood supply and/or wood costs, any change to province s tenure system, or any of its elements, is of direct interest to the forest sector. In 2011, as part of a broader initiative to reform the tenure system, the province passed new legislation, which among other things, expanded the number of tenure models in the province. While some elements associated with this broader initiative were built on principles or elements already in place, others have created a degree of uncertainty within the forest sector. The following section provides the reader with a brief history of tenure in the province, the status of tenure reform/modernization efforts, the forest sector s concerns, and the ongoing processes that are currently in place to address these issues LEGISLATION Prior to 2011, tenure in Ontario was governed exclusively by the Crown Forest Sustainability Act (CFSA, 1994) 1. While most of the provisions and directions under the CFSA remain intact, in 2011 the province passed the Ontario Forest Tenure Modernization Act (OFTMA) 2, which created a foundation for the government s vision of a new tenure framework. Key elements of the legislation include provisions for new tenure arrangements and increased decision-making powers for government. Most notably, the OFTMA amends specific sections of the CFSA to provide the government with increased authority to cancel existing wood supply arrangements, subject to certain conditions TENURE MODERNIZATION BACKGROUND Since the development of the CFSA in 1994, the primary method of assigning management responsibilities and allocating fibre resources has been through a mechanism known as a Sustainable Forest Licence (SFL). In essence, SFLs provide the holder(s) of the licence the right to harvest the fibre on a specific management unit, and in return, require the licence holder(s) to plan, and carry out, forest management activities. The CFSA provides for two basic SFL arrangements an SFL that is held by a single company (typically a company with a processing mill in the province), known as a single entity SFL, and an SFL that is held by a collective of companies, known as a Shareholder SFL. Under the single entity system, the individual company holding the licence directly retains the management responsibilities outlined above. Under the Shareholder model, the various companies involved typically set up a new corporation (of which they are all shareholders) to hold the licence and represent their collective interests. A Boreal Forum White Paper 53

56 2 Management of the Forest Standards and Practices (cont d) Figure 2.18 provides a current overview of the various SFLs and tenure models across the province (the map also illustrates Crown Management Units which are under the management of the province; Crown Management Units include management units that have been returned to the government following company insolvencies). FIGURE Sustainable Forest Licences in Ontario Map modified from 3 Ontario Ministry of Natural Resources and Forestry, October Local Forest Management Corporation Under the CFSA, fibre prices are set by the government on a monthly basis according to tree species and quality, final product, and market conditions 4. In better markets, the price of fibre goes up so that the government receives a fair return for its resources. 54 A Boreal Forum White Paper

57 In 2009, citing desires to provide more flexibility in the way fibre is allocated and priced, to enable new tenure models, and to create a system that is more responsive to changing economic conditions and better able to withstand economic downturns, the provincial government announced its intentions to modify/ modernize the tenure system. Stated objectives of the government proposal at the time included 5,6 : creating greater separation between consuming mills and the management of provincial forests; providing opportunities for new entrants to access fibre; establishing and maintaining competitive market conditions for fibre; moving towards a pricing system informed by competitive markets; providing opportunities for meaningful involvement by local and Aboriginal communities; and creating mechanisms that promote the full utilization of available fibre resources. The outcomes and elements of this initiative are discussed in the following section OUTCOMES As noted, in 2011 the government passed the OFTMA. At its core, this new legislation provides the foundation for the government to create two new tenure models. These are: Local Forest Management Corporations (LFMCs): LFMCs are government agencies designed to manage the forests and oversee the marketing and sale of wood at a management unit level. Unlike existing tenure models, LFMCs are governed by a locally based, independent Board of Directors that have no current ties to industry, thereby creating full separation between mills and forest management activities. LFMCs are specifically provided with authority to negotiate the sale price of fibre with consuming mills/customers (i.e. a move towards more open market pricing). Unlike other tenure models, LFMCs are also able to retain a portion of the Crown charge payments for fibre that are usually submitted to the province. The LFMC can re-invest these funds directly into the management of the forest 5,6. To date, there is one LFMC in the province the Nawiinginokiima Forest Management Corporation (NFMC) (see Figure 2.18). Enhanced Sustainable Forest Licences (esfls): Similar to existing Shareholder SFLs, esfls consist of a number of companies with individual interests in accessing the fibre on a given management unit, however, with some additional enhancements. Mandatory requirements of esfls include 5,6 : providing for meaningful local and Aboriginal community involvement, including representation on the Board of Directors; creating greater separation between mills and the management of the forest through the hiring of an independent manager to deal with all management decisions in an impartial manner; promoting greater utilization of fibre (e.g. if one company cannot use its allocation, make it available to others); creating on-ramps for new entrants (i.e. a mechanism to let new companies become shareholders); and enabling a portion of the available fibre to be sold through open markets. A Boreal Forum White Paper 55

58 2 Management of the Forest Standards and Practices (cont d) To date there are no finalized esfls although discussions are underway in many parts of the province, particularly on Crown Management Units that have been returned to the province. Together, these new models (LFMCs and esfls) represent the provincial government s preferred approach to tenure. As referenced, the OFTMA also provides the government with the authority to cancel existing company wood supply commitments/agreements, either to facilitate the development of an LFMC or an esfl, or to take back all, or a portion of, the allocation if the current company is not sufficiently utilizing its allotment CONCERNS AND CONSIDERATIONS As noted, the various elements of tenure (e.g. assigning management responsibility, allocation of fibre, and pricing) have the ability to impact wood costs or individual company fibre allocations. In response to the province s tenure modernization efforts, the following are considered by the forest sector to be critical to any successful tenure model/system 7,8,9 : Certainty of supply: Companies unable to obtain the necessary fibre supplies to sustain their manufacturing operations face lower returns on their capital employed, or in severe cases, are not able to operate at all 10. As such, companies are reluctant to make long-term investments if they do not feel that they have long-term security of fibre. In order to encourage investment, existing wood supply commitments need to be maintained and harvest operations need to be implemented in a manner that ensures mills receive fibre in a timely manner. Cost of fibre: Any increase in the cost of fibre could affect the viability of the sector (as noted in the following chapter, Ontario is already a high-cost jurisdiction). Tenure models need to be able to provide low cost management fees (i.e. the overhead costs associated with forest management planning), ensure efficient and cost-effective harvest operations, and maintain an overall competitive cost for fibre. Certification: Third-party certification has become an important tool that allows SFL managers to demonstrate that operations are conducted in a sustainable manner. All tenure models need to ensure that the right certification system is in place so that consumers/mills are able to meet customer needs and access markets. Overall, how much these various elements will impact the forest sector depends largely on the extent to which tenure reform proceeds and/or the development of appropriate checks and balances to prevent unintended consequences. 56 A Boreal Forum White Paper

59 MOVING FORWARD In response to these concerns and considerations, various processes and checkpoints have been established by government, either directly in the legislation or via additional protocols, to help guide tenure reform activities. These include: the development of a joint industry-government committee to define sufficient use of fibre; limiting the number of LFMCs in the province to two for an initial period of five years (starting in 2011 with the passing of the new legislation); a commitment to review all tenure models in the province (single entity SFL, Shareholder SFL, esfl, and LFMC) and to evaluate and compare their performance against agreed upon criteria 11 ; and the development of a principles document to govern the conversion of existing tenure formats to esfls 12. The development of the principles document is particularly noteworthy as it represents the collaborative efforts of the forest sector, communities, First Nations, and the provincial government to develop a consensus-based framework to ensure that the positions of all parties are recognized and respected during any future conversion to the esfl model. This framework includes, but is not limited to, the following commitments: gradually transition to esfls; support a locally driven process that reflects the needs and priorities of local participants; promote competitive wood costs; honour existing wood supply and harvest commitments; establish a Board of Directors that represents local parties; respect the rights of existing shareholders (where Shareholder esfls are being transitioned to esfls); and promote the sustainable use of the full available Crown wood supply. The success of tenure modernization, and to an extent the viability of the forest sector, will likely depend greatly on the outcome of these processes. It is likely that all current tenure models (LFMC, esfl, Shareholder SFL, single entity SFL) will exist on the land base for several years as each system is evaluated to see how well it meets the objectives of tenure reform. A Boreal Forum White Paper 57

60 2 Management of the Forest Standards and Practices (cont d) SECTION REVIEW This section was intended to draw attention to some of the recent developments related to forest tenure in the province and to highlight the associated socio-economic concerns of the forest sector. A review of the steps being implemented to address these concerns was also provided. CITATIONS 1. Government of Ontario Crown Forest Sustainability Act. elaws_statutes_94c25_e.htm 2. Government of Ontario Ontario Forest Tenure Modernization Act. elaws_statutes_11o10_e.htm 3. Ontario Ministry of Natural Resources and Forestry. October Unpublished data. 4. Ontario Ministry of Natural Resources and Forestry. August Ontario Ministry of Natural Resources Strengthening Forestry s Future - Forest Tenure Modernization in Ontario. Queen s Printer for Ontario. 20p. 6. Ontario Ministry of Natural Resources. January Forest Tenure Modernization in Ontario Overview (Presentation). 7. Resolute Forest Products. September Personal Communication. 8. Legislative Assembly of Ontario. April Official Report Journal of Debates, Monday April 11, 2011, Standing Committee on General Government, Ontario Forest Tenure Modernization Act, committee_transcripts.do?locale=en 9. Legislative Assembly of Ontario. April Official Report Journal of Debates, Monday April 13, 2011, Standing Committee on General Government, Ontario Forest Tenure Modernization Act, committee_transcripts.do?locale=en 10. Northwestern Ontario Forest Council An Economic Impact Analysis of the Northwestern Ontario Forest Sector. 118p. 11. Ontario Ministry of Natural Resources and Forestry. September forest-tenure-modernization 12. Ontario Ministry of Natural Resources Principles for Enhanced Sustainable Forest Licence Implementation. Unpublished. 3p A Boreal Forum White Paper

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62 3 The Forest Sector CHAPTER OVERVIEW The forest sector is an important contributor to the economic and social well-being of the people of Ontario and hundreds of municipalities across the province. It provides employment, the provision of royalties and taxes to various levels of government, and the generation of revenues through the sale and export of forest products. This chapter is intended to highlight some of the economic and social contributions of Ontario s forest sector and in doing so, outline its overall importance to the province. This chapter will also review some of the issues and challenges currently facing the forest sector and provide a summary of the forest sector s economic outlook and future opportunities ECONOMIC INDICATORS FOREST RESOURCE PROCESSING FACILITIES (MILLS) Currently, 127 forest resource-processing facilities (mills) receive fibre from provincially owned, or Crown, forests in Ontario (Table 3.1 and Figure 3.1) 1. In addition, there are several other mills across the province that rely entirely on recycled materials, fibre from private lands, or the by-products of other mills to manufacture new products (not shown on map). The majority of forest sector mills are located in Southern Ontario, however, these typically represent smaller mills that serve niche, or specialty markets. Mills located in Northern Ontario tend to be more commodities based (e.g. lumber, pulp) and account for the majority of fibre harvested from the province s forests. Sawmills are the predominant type of processing facilities accounting for approximately 76% of all mills that consume Crown fibre. Table 3.1 provides a breakdown of all facilities that consume Crown fibre by mill type. TABLE 3.1. *Forest Sector Mills in Ontario that Consume Fibre from Crown Lands, by Mill Type Data obtained from 1 Ontario Ministry of Natural Resources and Forestry, August Mill Type Total Sawmills 97 Pulp & Paper Mills 7 Composite Mills 4 Veneer Mills 1 Other (including Chippers and Fuelwood) 18 Total 127 * Mills must have been in operation at some point between April 1, 2014 to March 31, 2015 with a minimum utilization of 1,000 m 3 or more of Crown fibre. 60 A Boreal Forum White Paper

63 FIGURE 3.1. Map of Forest Resource Processing Facilities in Ontario Map obtained from 1 Ontario Ministry of Natural Resources and Forestry, August A Boreal Forum White Paper 61

64 3 The Forest Sector (cont d) EMPLOYMENT AND KEY ECONOMIC INDICATORS Ontario s forest sector employed over 55,000 people directly in 2012, with wages and salaries provided by the forest sector amounting to almost $2 billion in According to 2006 Canada census data 3, 28 communities, primarily in northern Ontario, had 20% or more of their labour force employed by the forest industry, highlighting the importance of the forest sector at the community level, particularly in the northern parts of the province. Recent estimates indicate that the forest sector employs over 150,000 people directly and indirectly 4. Figure 3.2 provides an overview of direct employment and wages/salaries over the past several years 2. Direct employment levels in the forest sector dropped continuously between 2004 and 2011, with a slight rebound occurring in Similarly, total dollars in paid in wages and salaries fell between 2004 and 2010 before levelling off in Although statistics are not readily available for Ontario, other regions have established relationships between harvest volumes and employment levels. For example, in Quebec, it is estimated that 325 direct and indirect jobs are provided for every 100,000 cubic metres of fibre harvested and processed 5. Although it is not likely that this information is directly transferable to Ontario, it does provide some level of insight into the employment potential of the sector. Additional discussion on the importance of maintaining available harvest volumes is provided in the following sections. FIGURE 3.2. Direct Employment and Wages/Salaries Data obtained from 2 Natural Resources Canada, June ,000 90,000 80,000 70,000 60, ,000 30,000 20,000 10, Direct Jobs Wages/Salaries ($Billion) 62 A Boreal Forum White Paper

65 Capital expenditures dropped between 2004 and 2010 followed by a notable increase between 2010 and 2012, eventually reaching a level of $426 million (approximately 74% of 2004 levels) (Figure 3.3) 2. The recent increase in capital expenditures is particularly noteworthy as it is recognized that companies tend to invest when the market indicates a strong future demand for forest products 6. Total revenues for the forest sectors decreased between 2004 and 2010, levelling off in 2011 at $11 billion. These decreasing trends observed across most economic indicators from 2004 to 2010 are reflective of a major global economic downturn, which impacted the forest sector over much of the past decade. Some of the underlying contributors to this downturn are discussed later in this chapter. More recent trends, including the recent increase in capital expenditures, however, may indicate that a recovery is underway. Market recovery, including specific market predictions, is discussed in more detail in the final section of this report. FIGURE 3.3. Expenditures (Capital) and Revenues Data obtained from 2 Natural Resources Canada, June Expenditures Capital ($Millions) Revenue from goods manufactured ($Billions) FOREST DEPENDENT COMMUNITIES In Ontario, 260 communities are dependent on the forest sector for their economic and social well-being (see Figure 3.4) 4,7. These communities are located across the province, including Southern Ontario. The majority of communities classified as having very high or high dependency are located in Northern Ontario. The classification of dependency (very high, high, moderate or low) is determined through a government calculation and is based primarily on the percentage of the local labour force employed in the forest industry. A Boreal Forum White Paper 63

66 3 The Forest Sector (cont d) FIGURE 3.4. Map of Forest Dependent Communities in Ontario Map obtained from 8 Ontario Ministry of Natural Resources, June A Boreal Forum White Paper